Ravi Chandra Manda

MBA II Year
Sheena Jain
MBA II Year
Team : The Dependables
NMIMS, Mumbai

Aanchal Sahdev Pranav Desai

MBA II Year MBA II Year
Building a variety of Powertrain solutions
Oil Imports
Government’s intent to put a
check on increasing oil imports
Govt. Support Customer Demand
87% of Indian drivers would buy
Support to automakers to raise
an electric vehicle (EV), if that
production of battery-powered
helped reduce air pollution
and alternate-fuel vehicles
(Survey)

Shifting Grounds of Electrification

OEMs Roadmap
Machinery
Before Adoption of
Electrification Electrification
Charging
Infrastructure
“One size fits all” “Multiple Solutions”

Battery
Component
Overall Strategy
“Innovating for our customers by picking the right energy solution for them”
Automotive Sector: Industry Analysis

2 Wheeler Electric Market Buses

  E-Bike Petrol Run Bike KEY PLAYERS Diesel Pure
Segment Bus CNG Hybrid Electric
Range(Kms) 70-120 300-450 Hero Electric Vehicles Pvt. Ltd., Electrotherm
(India) Ltd. , Avon Cycles Ltd., Ampere Vehicles Model Volvo Tata CNG Tata Hybrid BYD
Pvt. Ltd., Lohia Auto Industries Costs 88 lakhs 30 lakhs 1.2 cr 2cr
Price(INR '000s) 90-125 75-120
Fuel Cost(INR/per Km) 23 13-19 15-17 10
Fuel Effieciency(km/L) 2.2 2.5 4 1.5 kWh/Km
Factors driving sales Factors hampering sales Range(kms) 484 260-390 300-520 250
• GOI Regulations • Low number of Fuel Tank (in L) 220 720 720 NIL
for Carbon charging stations Charging Time NIL NIL NIL 3-6hrs
Emissions • Cluttered market Battery     Li-Ion Li-Ion Iron
• Subsidies to drive with substandard
sales products 1. Navi Mumbai Transport
Procurement 2. BEST Mumbai
3 Wheeler Electric Market status 3. Himachal Road Transport
illion
Doll ars
KEY PLAYERS 4. Bangalore, BMTC
1.1 B
5. Thane Municipal Transport
Lohia Auto Industries, Kinetic Green Energy &
Power Solutions Ltd., Hero Electric Vehicles Pvt.
Ltd., Saera Electric Auto Pvt. Ltd., Terra Motors
India Corp., Clean Motion Current Goldstone Infratech – BYD,
Players Tata Motors, Ashok Leyland
Factors hampering sales
• Lead-acid batteries need to be replaced every 7-
8 months Target to electrify public fleet buses to benefit
Factors driving sales • Unavailability of e-rickshaw charging points from the economies of scale as well as to
• E-rickshaws faster than pulled rickshaws • Licenses issued without testing driving skills
• GOI scheme FAME to curb rising pollution • High interest rate charge of unorganized lenders
instil confidence in the minds of general public
 3 Wheeler Electric Rickshaws
Market Market Entry Competitor
Overview Strategy Analysis
Capacity Brand Price Warranty
1. Unorganized players control 35-40% • Increase brand awareness in battery market 100 AH Exide E-RIDE 6800 6 months
of the market • Develop technical know-how for LAB
88 AH Exide E-RIDE 5500 6 months
2. GST boost to organized market • Leverage distributor network to develop
3. Lead acid battery price(imported from channel for batteries 80 AH SF Sonic Vahak 7527 6 months
China or bought by local • Tie-up with other distributors already in place
100 AH SF Sonic Vahak 7548 6 months
manufacturer at 1 – 1.5k cheaper): 5-
8k 120 AH SF Sonic Vahak 8800 6 months
4. Replacement needed every 7-8 Go-to-Market 95 AH Amaron 6450 6 months
months for lead-acid batteries Strategy 105 AH Amaron 6750 6 months
110 AH J P Minda 5765 6 months
• Product: Lead-Acid batteries (Majorly Used, low 100 AH Livguard 6125 6 months
cost, quick Replacement, used in most e-rickshaws
• Place: Last mile connectivity in cities with metro 100 AH Extra Power 5100 6 months
stations, cycle rickshaw replacement, inter-campus 100 AH Telgo 5200 6 months
travel within offices, universities and public places
• Promotion: POS material, branding on product,
E-rickshaw sales expected to grow at a E-rickshaw battery market to grow at loyalty schemes like discounts and free trips • AMRJ’s and EXID aggressively promoting their
• Price: Benchmarking price vis-à-vis competition at
CAGR of 15-20% over FY17-20 16.4% CAGR over FY17-20 brands to tap a large share from local battery
22-28k/battery pack manufacturers
Business Model • EXID has launched the E-RiDE brand, and its
associate, SF Sonic Batteries has launched the
Vahak brand
• Both offering high warranty period products
Manufacturer (upto 12 months warranty, as against standard
Cummins Branding Distributor Retailer End customer
INR 20976/Battery Pack of 6 months)
INR 20900 INR 25200 INR 26300 INR 28000
Automotive Sector: Strategy for Buses
Market Entry
Strategy • Start with Hybrid engines considering cost and efficiency
• On-highway is OEM driven business, Tata Motors playing a key role in electrification of transit buses therefore low
entry barrier to provide electrification solutions for Buses
• Scope to run pilot projects in smart cities with public private partnership to ensure the sustainability of the model

Value
Proposition • Complement already adapting BS VI emission norms
• Driving volumes to reduce initial investment using public procurement
• Route Predictability, Vehicle Utilization, Policy Intervention Potential in transit buses
• Presence of strong distribution network and after market sales and services

Opportunities & Challenges Competitive Landscape

• Assess opportunities in localization of manufacturing operations

• Target cities as customer: Align portfolio to match city mobility needs
• Need to leverage the acquisitions of Brahmos and Johnson’s Matthey battery expertise to gain
traction and start of inhouse manufacturing
• Need to focus on improving range of vehicles and batteries capable of faster recharge
• Though the capital cost of E bus is 2-3 times of Diesel bus but operational cost is 65% lower
Powergen Segment : 1/2
Market Entry
Strategy • 85% of DG sets being used for backup power
• The bigger demand driver for DG sets in industrial, infra and real estate
• Tap UPS market (8-10% growth) with enhanced technologies in batteries by collaborating with suppliers like HBL
• Building and extension of solar Microgrids for Rural Electrification

Sectors to enter
Commercial: Datacentres include backup power supplies in the form of HHP DG sets (750kVA and above) DG sets
Telecom: (<75kVA), hospital and hotels to be ventured into
Infrastructure: Power source for Railways and Metro Rails
Rural Electrification: Help of Government and OEMs like Jakson and Sudhir with renewable sources of energy

Drivers for Electrification

1. SMART Grid regulations 1. Li-ion prices to reduce from 450 $/KWh in 1. Govt. commitment to Paris Agreement (175
2. Electrification of Railways by 2022 2015 to below 200 $/KWh by 2020 GW of renewable power by 2022)
3. Reduced Oil Imports (Volumes & Costs) 2. Focus on Micro Grids for Rural Areas 2. 0.3% of total GHG emissions is from
4. Deen Dayal Upadhyay Gram Jyoti Yojana 3. Reduced cost of Solar Panels Powergen Segment
5. Soubhgya scheme 4. DG Renewable Battery hybrids in Telecom 3. Trend towards Silent Gensets and
Sector replacement of diesel by renewable sources
Powergen Segment: 2/2
Competitive Landscape Offerings

UPS ESS Micro Grids Lithium Ion Batteries

• Exide, Amaron -> 60% of commercial UPS Market
• Success -> Wide range of products, Energy Storage Solutions
Good Distribution Network
Photo-Voltaic +Batteries

Micro Grid Extension

Li Batteries UPS Battery market size in India (Cr.)

2900
2400
1800

2017 2020 E 2022 E

Source: Frost and Sullivan, India UPS market OEM Replacement

Value
Proposition 40%
• Power utilities maintain grid stability, reduce the reliability on backup and remote grids
60%
on diesel
• The growth factors are Vertically unbundled utilities and leading battery manufacturing
• Paves way to have Peak Load shaving
Source: Motilal Oswal Report
Go-to-Market Strategy
Commercial Vehicle Segment Selection of Cities for Pilot Projects
PowerGen Segment
Short term: Push strategy for adoption of Factors Considered:
electrification of intra-city buses • GDP Contribution • Enter the UPS market to
• Increase Awareness through Talent Shows / • Presence of Infrastructure on a provide one-step power
Event Participation, Brochures for OEMs, scale of Low to High backup solutions to
Updates on website • State Road Transport Support for customers across different
• More demonstration projects including EV pilots Charging infrastructure and Grid segments
and national outreach programs through social • Undertake Solar micro-
support
media • Environmental concerns among the grid projects by State
• Pilot programs by state governments/OEMs citizen governments and OEMs
Long term: Pull strategy • Pollution levels • Undertake infrastructure
Focus on Loyalty program schemes and setting up of Selected cities: Delhi, Mumbai, project in cities with metro
retail shops for batteries and variety of solutions for Bengaluru, Hyderabad, Ahmedabad projects
customers.

Channel Strategy for batteries across different segments

Existing Cummins customers
Manufacturers/
Suppliers Rebranding Retailer cum OEMs
Dealers
service centre

Powergen
Non-Cummins,
small customers

Commercial Vehicles 8
Business Model: Realign to be a leader in Powertrain
Resources and capabilities of Cummins
EXISTING
• Leverage existing global acquisitions : Brammo, EDI, Johnson Matthaway and expected acquisition of Kamaz
• Leverage Partnerships with suppliers and dealers : Amaron, HBL
• Lobby with government
• Distribution network our biggest advantage

NEW OPPORTUNITIES
• Explore new tie-ups/collaborations to penetrate EV market
• Leverage the Pune Technology centre and manufacture battery packs and future tie ups with charging operators for battery
swapping technology

Processes
• Several OEMs are focusing on model based platforms that can house powertrains from zero to any level of electrification
• E-powertrains gives platform modularity and accommodates any level of electrification if the market demands

Profit Formula

• Battery cells account for 50% of the total costs, also OEMs working on reduced margins to lower the cost further
• Willingness to pay upto 20% premium for EVs over vehicles with ICE Engines
Untapped Opportunities & Why not Off Highway

Healthcare

• Medical diagnostic market to grow from $12Bn to $22Bn by 2022.

Untapped • Imaging market contribution – 30%
Opportunities • Dominant UPS: 5-50KVA, but demand for 50-200KVA also
• Major applications include: Dental Chairs, Radiology equipment, Ophthalmology
equipment

OFF HIGHWAY

• Still making transition from BS III to BS V

• No stricter emission norms comparted to other sectors
Why NOT
• Requires high horse power engines for most of the products, battery capability needs to be
Off Highway
drastically improved in the above 20T category
• Vehicle life is higher, usually about 6-7 years and the end customer will be unwilling to
replace it immediately
• Initial investment is too high, highly unpredictable demand unlike public sector transit buses
References

1. Reports from Frost & Sullivan

2. https://go.semcon.com/hubfs/content/Semcon_Potential-and-trends-in-off-highway-vehicles%E2%80%99-
electrification_Aug2017.pdf
3. Reports from EY
4. https://www.machinedesign.com/mechanical/are-highway-equipment-and-heavy-duty-trucks-going-all-
electric-soon
5. ICAT
6. Articles from Mint
7. Bloomberg
8. https://economictimes.indiatimes.com/topic/electric-buses-in-India
9. https://auto.ndtv.com/news/electric-urban-bus-with-over-200-km-range-launched-in-india-by-goldstone-
byd-1862959
10. http://www.forbesindia.com/blog/economy-policy/electric-buses-an-opportunity-to-transform-public-
transport-in-india/
11. https://www.intelligenttransport.com/transport-articles/67395/electric-buses-fully-electric-fleet-india/
12. https://www.livemint.com/Industry/y0tzU2VfwgdluLkQl9cOHN/Hero-Electric-expects-to-turn-profitable-in-
FY19-as-demand-f.html
13. http://www.autocarpro.in/news-national/exclusive-yamaha-developing-allnew-electric-2w-platform-for-
india--global-markets-40689